IBM allegedly crippled the PC fearing it would cannibalize their highly profitable small systems sales, namely System 36. They eventually brought out a smaller

IBM allegedly crippled the PC fearing it would cannibalize their highly profitable small systems sales, namely System 36. They eventually brought out a smaller System 34 and ported Displaywrite to the PC but it was too little, too late. When the PC first came out it really wasn't that cheap. It took grey market PCs before consumers saw any decent discounts for brand name IBM PCs. Once clones landed then it was a race to the bottom. Even so having worked in retail computer sales myself at the time you are correct that cheap and functional often won the day over brand name. This was before Microsoft had cemented their lead on productivity apps so we sold plenty of Altos Xenix machines to small businesses and tons of Kaypros to budget-conscious college students. People were perfectly happy with Informix, Multicalc, Wordstar and Lotus 1-2-3.